11.00am UPDATE
FALLUJA, Iraq - US forces backed by Iraqi troops have surged into the heart of Falluja, taking a grip on Iraq's most rebellious city after a day of intense street-to-street combat.
The Pentagon said at least 10 US and two Iraqi soldiers had died since the offensive began on Monday night.
After sunset on Tuesday US tanks and armoured personnel carriers in the northern part of Falluja came under fierce assault from rebels firing rocket-propelled grenades and AK-47 rifles.
Residents said explosions echoed in the night, but it appeared most large-scale fighting had eased.
Some US tanks were seen pulling back from central areas of the city for the night. Others remained in place.
"I think we are looking at several more days of tough urban fighting," said the US commander in charge of day-to-day military operations in Iraq, Lieutenant-General Thomas Metz.
Metz told reporters insurgent casualties had been higher than expected and civilian losses low. He gave no details.
A US military ambulance driver told Reuters he had seen many casualties.
Residents said a US air strike hit a clinic in a central district, killing some medical staff and patients.
A 9-year-old boy, was also severely injured by shrapnel in the abdomen when his home was bombarded by US jets overnight.
His parents were unable to get him to hospital and he bled to death. They buried him their garden, they said.
INSURGENTS STRIKE BACK
As battles raged in Falluja, insurgents hit back elsewhere with attacks on police stations in Baquba and Baghdad, fighting in Ramadi and a mortar attack in the northern city of Mosul.
But in Baquba, the official in charge of the main morgue denied earlier reports 45 were killed in attacks claimed by al Qaeda ally Abu Musab al-Zarqawi. He said he had not dealt with any dead from the attacks.
Interim Prime Minister Iyad Allawi used emergency powers he activated on Sunday to impose an indefinite curfew on Baghdad from 10.30 pm (8.30am NZ time) to 4am (2pm NZ time) every night.
In Falluja, a Marines tank company commander -- part of a US-led force of at least 10,000 -- said guerrillas were battling hard in the northern Jolan district.
"They are putting up a strong fight and I saw many of them on the street I was on," Captain Robert Bodisch told Reuters.
Many families had fled the city of 300,000 to escape air raids before the offensive. The US military said about 150,000 residents had taken refuge outside Falluja.
Residents say they have no power and use kerosene lamps at night. They keep to ground floors for safety. Telephones are erratic and food shops have been closed for six days.
Iraqi troops brought nine handcuffed prisoners to a railway station on the northern edge of the Jolan area where US and Iraqi forces are based. They said two of them were Egyptians and one was Syrian. The rest were Iraqis.
The interim Iraqi government and its US backers say foreign Muslim militants led by Zarqawi are holed up in Falluja along with Iraqi rebels.
But Metz said Zarqawi and other leaders had most likely escaped the city to regroup elsewhere.
A suspected car bomb outside an Iraqi National Guard base near Kirkuk killed three people and wounded two. In Samarra, a senior local government official was assassinated, police said.
Sami al-Jumaili, a doctor at the main Falluja hospital who escaped arrest when it was taken on Monday, said the city was running out of supplies and only a few clinics remained open.
"There is not a single surgeon in Falluja. We had one ambulance hit by US fire and a doctor wounded. There are scores of injured civilians in their homes whom we can't move.
"A 13-year-old child just died in my hands," he said by telephone from a house where he had gone to help the wounded.
The government sees Falluja and its sister city of Ramadi as rebel havens that must be retaken before January elections.
But a leading Sunni clerics on Tuesday urged Iraqis to boycott the election because of the treatment of Falluja.
Defence experts believe that while US forces have the muscle to win the battle of Falluja, victory still may not deal a lasting blow to the insurgency in Iraq.
"It may not take long to capture the city, but nothing will have been resolved. It will be a symbolic victory," French military strategist Jean-Louis Dufour said.
- REUTERS
Herald Feature: Iraq
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10 US soldiers die as forces take hold in Falluja
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